SANFORD, Fla. Dinesh Sheth, the former owner of Parsam Technologies, has filed suit against Harland Financial Solutions alleging the latter has deliberately failed to comply with a 2010 purchase and sale agreement under which Harland acquired his company and its primary product, uMonitor.
Sheth alleges in the suit that Harland agreed to buy his company for $33 million in cash and a $25-million “earn out,” but that due to changes made by Harland upon acquisition the earn-out could not be earned. The lawsuit states that Raj Shivdasani, the president/CEO of Harland, “assured Sheth that [Harland] always used an earn-out as part of the purchase price for businesses they acquired. Shivdasani further stated that Holdings, and its related entities, used the earn-out as an incentive to make certain that the present management stayed involved beyond the transition from one entity to another and to ensure that the transaction was a financial success.”
According to the suit, “Shivdasani stated to Sheth that he had reviewed the financial information regarding Parsam and represented that the entire proposed earn-out of $25 million would be realized. Shivdasani further assured Sheth that Sheth’s business plan regarding Parsam and SRCS would be followed and that Sheth would have input into how to implement the business plan and that Sheth would be an important part of the ongoing business.”
Sheth is alleging, however, that during 2011 his input was ignored and that he was marginalized and revenue projections for Parsam post-acquisition were “were substantially below those that had been used to substantiate the Earn-Out, and implied that the Earn-Out would never be paid.”
As a result, alleges Sheth, no portion of the earn-out of $25 million has been paid, and that he is seeking “damages, the costs of this action, attorneys’ fees, pre and post judgment interest and such other relief the Court deems just and equitable.”
Harland Financial Solutions currently is hosting its Connections conference in Nashville. Company officials acknowledged they are aware of the lawsuit but declined further comment.
